HCKT - Earnings call transcript Q3 2019

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Operator

Welcome to The Hackett Group Third Quarter Earnings Conference Call.

Your lines have been placed on a listen-only mode until the question-and-answer session. Please be advised the conference is being recorded.

Hosting tonight’s call are Mr. Ted Fernandez, Chairman and CEO; and Mr. Officer. Financial Chief Ramirez, Rob

Mr. Ramirez, may begin. you

Robert Ramirez

afternoon, discuss The and you results. thank to us joining for Hackett Good everyone, Group's quarter third

Speaking and and are today Ramirez, Chief Group; on answer Rob the questions Officer. your and here myself, Ted of CEO to Chairman Financial The Hackett Fernandez, call

the was p.m. at Eastern Time. press announcement wires A released over X.XX

For www.thehackettgroup.com. at a Web our site copy of visit the release, please

the is release statistical also the data financial discussed not place contained call this will page in We Relations or that on site. Investor of any on Web additional our

I future of a vary. and that information, considered which assumptions to making results, conjunction detailed are particularly difficult begin, the Federal statements guarantee not our These uncertainties the projections accurate. statements with comments contained our we question-and-answer SEC factors only risks, the results would the in in are purposes future expected which may Before be Securities expectations, like and of should filings. Laws. that be to you and estimates They the be to be that forward-looking and about relate in forward-looking remind session, not statements statements Actual and performance. current will predict we the in following involve risk may These may for

I to this Ted. turn like would At point, it over to

Ted Fernandez

quarter call. our earnings Thank Rob, third everyone, welcome, you, to and

on the operating well to will as do, will Rob results, on with I I overview open quarter. normally comment guidance. flow we comments turn call as cash As detailed over it the then on comment to back some

Q&A. opening we’ll our comments. it review strategy-related up then And will follow that We and up by for market

share forma both of and pro of which within net XX.X This were afternoon, earnings reported guidance. revenues our $X.XX, we of million per

revenues, U.S. was than compared $X.XX by by when performance international unfavorably to expected guidance. offset our which impacted results lower Solid

on our our actions impact the XXXX necessary Europe see to QX are results. we will of you volatility mitigate the from in As guidance, taking the

Consistent strategy solid ERP and and indicators, revenues the Total our our from X.X% of groups and transformation which U.S. revenue spite in experienced economic reflected activity, growth. EPM in decline. but on-premises impact business Oracle U.S. diminishing QX revenue up were with broad is and analytics unfavorable year-over-year

expect fourth quarter growth we year-on-year above the importantly, X%. More be U.S. to

the it QX front, saw resulted business we and On strategy quarter we third momentum transformation and mentioned. growth the solid built into U.S. in we’ve the carried into as

quarter. We expect the accelerate growth revenue into fourth to further the

related the make Cloud with our our in EEA our on-premise continue to decline in growth In group, implementations. strong offset practices, progress we by Oracle applications

reported Our allowed better up group EEA, SAP which nicely be EEA in the group, is within came than the quarter. which in to expected, overall

QX. We the group expect of accelerate further EEA to also growth the into

a uncertainty impact much affect making. client The the that operating story the tougher companies models UK volatile we ultimate Europe on dispute decision than expected. and was and require Brexit more will of continues to

As our to the in important and we we current thought our actions more the revenue market adjust take it cost line be saw Brexit to elongating, to with appropriate demand. dispute was

investments strategic continues the important Transformation we made are proprietary our of development all next our introduction our platform, drivers the investment of have Digital IP, benchmarking we growth. or the and our and highly Leap, of side, fully the generation that Platform Quantum Hackett to offerings DTP differentiate On believe digitize of to our

rapidly software EPM to digital RPA our in strategic relationships with and providers, smart be procurement, momentum. along investments growing also transformation strategy key continue to our automation in Additionally, with

impact growth, just starting are future of relationships the drivers but will important to these of our quarter and Some growth. fourth impact revenue are our

invest operations. profitability back and dividend, to This fund to stock while continue flow to cash we our side, us buy acquisitions sheet business. and increase continuing balance the allows strong from On generate our in

and strategy on flow conditions, on provide and Rob? market outlook. first also comment details results, I operating let will cash Rob me but on further to our ask comment

Robert Ramirez

Ted. Thank you,

I’ll I during with key of of XXXX. the third related cover topics our the and operating fourth conclude overview statistics, As cash will of an do, our discussion outlook activities our an the results this on an following financial typically during quarter portion along quarter then overview the of with the overview for I call; of flow quarter

and I For regarding EEA group our or Transformation purpose our separately or our as Business results ERP, of total comment and as this well Strategy and group of will international EPM the financial analytics S&BT, call, the company. Group solutions

our transformation our practices. as include executive S&BT offerings, American advisory North of benchmarking IP-as-a-service includes Our as and the programs which services well group results business our

EEA group and Oracle results SAP solutions our of the practices. includes solutions Our North American

results includes EEA our groups group based Europe. primarily that our and are the international Our of S&BT in

year that our grouped commented enhances this group. note differs how we the we practices the within S&BT Please in reporting volatility. believe its when given current international from have all providing international separately past our results We

expenses. to all note my represent revenues references In and reimbursable represent revenues addition, references excluding revenues that revenues gross please reimbursable including net in any expenses discussion to

European-based As XXXX, accounted discontinued operations as been at statements. working exited for our on our practice has previously REL capital which discussed, we financial of the end

and of as results references a tables normalized the rate Additionally, tax release. detailed cash press pro compensation our XX% expense, on non-recurring accompanying of non-cash intangible adjustments to and forma asset stock long-term expense exclude amortization assumes

reflected cash purchase and expense expense under the compensation for non-cash are which our GAAP. consideration items adjustments, related to the as of comp acquisitions, Acquisition-related portion

our for in continuing quarter QX The compared on the of X.X% the XX.X net X.X% to line prior expense from of when as the reimbursable guidance year. QX decreased million by prior our third revenues For range. was net and ratio compared to to revenues X% XXXX with XXXX, operations year was

or primarily expenses project was company associated gross million quarter Including and XX.X XXXX. from third in clients are reimbursable to our continuing impact Reimbursable passed profitability. expenses revenues travel-related margin no through to our of the have expenses, operations

in basis by a results an strong third million of on up the of group most basis. Net quarter our EEA year-over-year XX.X across were of for were a XX.X revenues third the million of the group of on increase XXXX, in revenues an for X.X% quarter driven Net year-over-year practices. solutions XXXX, increase our X.X% S&BT

This Oracle was ERP growth our EPM as cloud partially our our well EPM on-premise from strong and by practices, as Oracle practices strong offsetting driven growth SAP revenue from declines.

is Specific to U.S. year-over-year cloud in cloud the to approximately our Oracle implementation improved on EEA, resulting XX% mix revenue, within revenue was a growth in XX%. our practice of of excess which now on-premise basis,

X.X quarter surrounding continue Brexit of to higher have was to basis. our the third for revenues international XX.X% This a expected as client group appeared impacted making. uncertainty on decrease in Net year-over-year million were of a decrease decision the XXXX, than

Brexit, when In addition European a acquired. to was a engagement meaningful was client portion discontinued of the

total results were our compared $X.XX by pro to As a of result when negatively our third quarter’s approximately these forma impacted guidance. factors,

revenues quarter Total quarter total the of to compared XXXX the the company international of third third XX% net as XX% prior revenues company in of accounted for in year.

best company Our third recurring revenues, groups, the revenues XX% include approximately company our and pre-tax for practice and quarter of net total of advisory which profitability and executive our XXXX. accounted our total in of XX% AMS approximately

million year. XX% third sales, or XX.X% quarter excluding company forma XX.X million or same net reimbursable the period net of compared for XX totaled to of revenues in revenues of Total the cost XXXX prior the as expenses, pro of in

third third in quarter the of end was XXXX of X,XXX to of previous headcount consultant X,XXX net as the revenues was pro XX.X% company XXX quarter as XXXX third of at year. quarter the forma third in the end the the company the gross to quarter quarter in at XXXX. previous of compared compared Total and the Total margin of XX% of

gross year. was compared on and by XX.X% subcontractors The the in margin quarter. of increase the S&BT driven was higher XXXX in of revenues prior net to third utilization quarter the margins the quarter XX.X% lower revenues of third during as

XXXX was gross third on prior driven was margin compared utilization of third XX.X% in XX.X% the driven by the revenue the EEA in of the decrease of quarter primarily net The by during margins quarter. of primarily to growth as higher year, the group. subcontractors revenues improved quarter

driven in third XX.X% of margins of group, International as revenues in year, quarter XXXX the primarily quarter third decreased in discussed. gross as the the the by prior to compared net on XX.X% previously was revenues

was XX.X and was of in the as the million revenues of compared year XX% periods. both to previous XX in XXXX million third the XX% represented and same XX.X year and quarter million Pro in represented as XXXX net quarter prior of EBITDA to of the XX.X in the XX% of SG&A compared in forma period Pro third forma net million revenues, respectively.

$X.XX per pro XXXX quarter Total the diluted with This for share compares forma line of the company third of in X.X forma which or in totaled income net pro was our guidance. to quarter or per income XXXX. $X.XX million net X.X third quarter’s share, of third diluted million

XX% was of pro the Our equity forma for third on quarter return XXXX.

quarter per relating as acquisition adjustments loss additional XXXX $X.XX the the due Previous operations. earnings a the expense earnings share to year for diluted XXXX share from $X.XX GAAP of to year. was to the in earn-out previous $X.XX diluted of GAAP as quarter the discontinued to per third third included $X.XX contingent liability compared well Jibe as

quarter and at payment of million previous XX.X quarter. semi-annual the than of third primarily offset compared dividend, end repayments, was to slight decrease our of million was end at XX.X the were attributable in the tax XXXX more strong balances cash The payments cash as company’s The debt from expenditures. capital the quarter third flow federal the operations, the which by to of

for in accounts of liabilities XXXX taxes, primarily and driven accounts and adjusted income million, by well in which increases receivable cash non-cash offset by increases by third accrued the activities operating as net items as Net in was quarter X.X generated payable. was income

as days days was or end compared of XX third previous quarter. end at DSO XX days the quarter the of sales Our of XXXX the to the at outstanding

quarter most be of meeting, of million. the paid shareholders, company declared X.X XXXX, next dividend At totaled semi-annual semi-annual per to share, paid its will Board the in which During the which $X.XX third dividend its XXXX. the January recent

The third fully total the million. debt its repaid This the quarter, the X.X the balance company end. subsequent to company’s quarter quarter XXXX of the facility. end outstanding balance million at During was X of on was remaining repaid credit of

I will to XXXX. everyone move to of seasonality to guidance our the our business. of for now remind turn I would fourth before But guidance, like quarter of the I

will quarter in fourth time that by to decrease Specifically, the approximately when days increased our and billing holiday X% taken quarter. the available third historically has the compared vacation

XX.X of to be be The the basis, of total fourth revenues net the to S&BT estimates XXXX to year-over-year expect EEA X% company up range both XX.X to X%. for quarter and a million million. On in we

reimbursable for international of range revenue XX.X be the to XX% million company gross estimates includes expect in XX.X an estimated We guidance be we X% The to to The as down to Brexit expenses. gross continue. concerns approximately expect million. revenues

in be restructuring result weakness a the reduced charges company to the fourth and forma severance These million. in were excluded related of as will Europe from These Australia. quarter As results. commensurate will pro we the staff X.X continued to incur international our costs primarily in charges charges demand both be approximately current with operations, of

earnings Relative payroll to utilization unfavorable days limits. of pro FICA to available partially corresponding the forma decreased reaching of lower U.S. impact from we by vacation billing diluted expect per taxes share, resulting offset U.S. the be and accruals

Europe excludes results range such, the As reserve, to It $X.XX. the approximately in earnings per which $X.XX note of the that forma expected be unfavorable to to in our XXXX impact. the forma important quarter to $X.XX the group expect fourth diluted international we is equates restructuring decline pro in pro of share,

net We gross to XX% be revenues margin on expect XX%. approximately pro to forma

We XX.X million. be fourth and to SG&A interest quarter the for forma expect pro approximately expense

the to of pro quarter in forma range on revenues net XX% XX%. fourth EBITDA expect approximately to We be

We sequential expect to up from cash generated on be a operations basis.

At I coming to outlook it like the back review would turn our this and strategic to Ted to priorities over for market point, months.

Ted Fernandez

Rob. Thank you,

forward, look growth demand reiterate thoughts the environment As and let our me opportunity organization. on our it offers the we

dramatically applications, rapid compete and development their way repeatedly As the deliver influencing digital transformation businesses intelligence artificial I have in is services. emerging mentioned, RPA cloud and the the enterprise along with

capabilities to changing entire redefining at is to workflows are in with organizations Digital digital competitive. fundamentally order Traditional, transformation and dynamic adopt and sequential, automated enhanced to change intelligence. linear-based remain accelerated pace, models and fully new business events these forcing an industries

tapes. transformative are side, competitive as U.S., determine currently companies of the in On the demand two resulting the respond tale to quickly experiencing to demand how we the are technologies increased changing environment. the In

in growth engagements our the cloud improve are prospects. We digital transformation seeing and growth

can transition transformation of As basis forward cloud clear. on see the a revenue next company and our that over and will quarters. a smaller to our several benefits complete we continue the engagements digital of part revenues, impact the our quarter-over-quarter increasingly becomes grow We become total as look on-premise diminishing

In impact effect making the decision Brexit transformation simply on China are clients making of Europe, and digital clearly trade decision as or the we elongate seeing defer dispute initiatives.

strategy side, our offerings to and around build with fully our clients and best our continue focused and on On our the intellectual capabilities us to brand strategically digitized should possible practices is continuously. our serve capital. focus This benchmarking whenever to unmatched transformations digital and allow new

no platform significantly we their and by releasing over global our you digital track as comparable deliver solution. Leap, leadership also Specifically, effort. believe market. client to know the We redefined transformation This us our respective effort. It us less more new software-as-a-service life that is benchmarking our allows in benchmarking IP information with platform Quantum of allows to the leverage there initiatives

are state has we strong. believe our year-to-date revenue benchmarking been art we the platform, see to from starting the very of benefits growth the just benchmarking Although

– differentiate We to and capabilities. unique our transformation IP are released DTP digital related all also or we platform our further

in As many us past, transformational has mentioned digitize in recent change. instrumental transformation IP our our implementation organization clients of I’ve proven business the software and help and and cloud DTP configuration DTP to drive to solutions align fully been wins. allowed

transformation attract our of believe current the add other to and our Given IP-as-a-service programs. to Leap improved success we platforms, strategic functionality to that the digital initiatives client will Quantum we to continue partners we and continue

digital the executive transformation unique launch We our other offerings. assessment. unmatched initiatives to further X,XXX clients IP We any our have brings now will capabilities brand over our case and expect to pilot demonstrate to business platforms with access that across credibility that and our IP-as-a-service advisory

even scale can our add which our strategically grow and growth. and Lastly, that look accelerate we capability though we offerings continue the base scope, we to to for leverage client business, believe the alliances have or acquisitions our IP,

have facility. mentioned, paid off Rob we fully our As

that and So we have believe continue our priority we in this and and leverage ability fits the to strategically any with will acquire a be us. organization, asset to culturally for

digital the resume the though our that allows It the investments in demonstrates us transformation the leading and our impacted our In cloud offerings weakness most software our we with highly us as applications expanded unfavorably differentiated continued offerings for even platforms, U.S. our RPA also in in we’re build partners summary, access capability growth. IP-as-a-service as strategic and which companies. Europe provides our opportunity also to momentum to of results, to and well additional global making

tireless by let the our As highly and stay them organization. our always, our me clients, and on close opportunities thanking to our associates always people focused their available efforts for to urge exciting

comments. my conclude Those

operator section Let us our it Q&A into over me turn our of and the let move call. Operator? to

Operator

first And Thank from Sutton question today’s Craig-Hallum. George you. with comes

Your line is open.

Adam Kelsey

your other talk stage going expectations taking Adam is was on George. relationships my are of Good Where Thanks evening. growth I questions. what for in with you This hoping can for Ted, that you and software the about are providers. forward?

Ted Fernandez

have several. Well, we

there within to at some relationships in future and and they that our and that our those look momentum business, of you business transformation are strategy reside current are critical the group If growth.

as those an with such continue be and have those example, relationships great our as to room think Our meaningful to to growth expand. organizations opportunities we Coupa,

side, Oracle on on that the of also have not in we meaningful EPM believe only more have growth around, are our we will and we also to Rob mentioned capability only the RPA growth but which revenue XX% XXXX. the We opportunities seeing other not part cloud become which started see EEA we build similar providers, side, plus,

significant those of we’ve our broadly. that I And clearly efforts are provide more will transformative and with our future technology So and of align important with decided are growth. are portion our speak that and focus change of significant think current a it’s driving software really we some providing to more the and to that a cloud importantly some

Adam Kelsey

any if continues plan anything strategic you. was to just Thank moving if there Great. current XXXX curious mitigate on long-term it you’re Brexit its is into thinking else trend? I drag on. obviously continues And then about contingencies or to

Ted Fernandez

going thing it’s reality in the current and to Well, is I’m of, fact It’s be quarter. not of XX% the the something but the the it’s proud that first marketplace.

make call So to with before way the I’ll drag you not sure and you align it takeaway allow the that really profitability the to opportunity that it have critical did in you or that’s quarter. a current

portion So clearly we us, the it with company. been at And quickly like that above making just have client align demand. opportunity meaningful instead of on which the Rob is loss look environment, easily to discontinued that reductions the said, or of of current normal easily general moved I European at the and by continues could fact of high it, quarter, mean was us say but of current to but matter could north cost I the marketplace that to XX% the the basis. be in XX% should the significant current revenue opportunity. The that acquiring a

where if that when we the to a it’s been it thereof that at now. look pretty add specifically that growth experiencing XXXX. to is our two it is working, With lastly, the as could realize at strategy easily that’s XXXX of we right more at aggressively wanted cloud, sure And U.S., market, we and the American hard look focus that add to offering, the we we’ve you fact company significantly that opportunity in capabilities we’re around and growth where IP-as-a-service make opportunity opportunity know, look a the and we you we that’s to throughout the North said, scale meaningful those acquiring. then be or transformation at at and business in look reasons the is and the in where have growth some the significant we look So shame

Adam Kelsey

Great. Thank you.

Operator

Instructions]. you. [Operator Thank

William Nicholas comes question with Blair. next from Our Andrew

open. is line Your

Andrew Nicholas

Hi. Good afternoon.

Ted Fernandez

Andrew. Hi,

Andrew Nicholas

on I good view It wanted to a just number touch in quarter. my quickly was this SG&A.

had Europe X.X would spending Just some rate that in? million that going then in to think or cost already if of quarter savings costs. guidelines what note, said curious terms I related a this if started is run you the hit in something And or you fourth pullback is of quarter? Any on just in result of in that severance sense

Ted Fernandez

was bonus you relative got the of the the primarily same I First FX know question benefits timing all we went in of in quarter. the review. asked very that G&A through we as some want I It quarter, to to accruals and quarterly

Robert Ramirez

on we we some non-charge target into that to expenses the tightening – Some into to went reduce went year spend.

Ted Fernandez

right. That’s to just saw a and increase over campaign some in There also our has we been benefit expense of manage more that quarter. aggressively the third non-charge and

our just management. to So call you normal, if cost want it

relative – On to the second question the your was restructuring.

protect Our and the we that fourth took really QX. were we the focused relative extent make We wanted it us on as that as to provide the greater but much a two would was to to the in actions things. quarter, could sure defended quarter quickly to fourth we benefit focus

that benefit eliminate at experienced the look that and fully took negative QX to year. in QX, when we as reserve eliminate look hit at or goal impact at $X.XX next we and we the as QX, look same did So we we that unfavorable in that hit example, so we of for that we that look at the was

plan. relative our offensive XXXX to very So

important was So do it it to now. we thought

Robert Ramirez

think add is -- would that that was X.X million, thing it you only would approximately statement I I said the my And be

Andrew Nicholas

I you Thank typically type maybe the to pricing cover on then costs? that comp price What No, able the queue, misheard. and are get in enough those was and Thank dynamics but general through more are to just in currently back space. a you. increases bit helpful I’ll then little of color. you. Yes, And push something

Ted Fernandez

would opportunity over of where S&BT No, One, kind business, are significantly months. two the business, of leverage our number What pricing clear. significantly. follow margin look it’s has of I the – pretty not our can at clear we you greatest, that kind seeing, changed margin IP our a two our last the XX expand things we’re when say things you if of

we’re that gross EEA improvement the So piece say evident margin at mentioned. that significant remains us. on to I for very Overall in starting that’s relative And seeing And scale on we��re implementations. the that part when Transformation Business that your margin, there. – but of and remain Group cloud plus business Strategy for pricing most margin and to to investments unchanged, opportunities that’s and resources the with leverage we’ve made where the on technology XX% margin more margin and offsite the our support us of point, second is we that Rob offsite significant your leverage that IP the question, but meaningful would improvement look to resources overall

Andrew Nicholas

much. very Thanks it. Got

Operator

next The with Partners. question Martin Jeff comes from Capital ROTH

line Your is open.

Jeff Martin

you? how Rob, Thanks. afternoon. Good are Ted and

Ted Fernandez

How are you, Jeff?

Jeff Martin

Thanks. changes foresee Ted, in you likely on size or you do size the on – cloud? any on well. are to horizon? are the Doing are the the you make mid And pipeline deal in larger any seeing any wins that

Ted Fernandez

Well, let’s our talk deal We increased about it. have clearly size.

period ERP acquisition get our better, to acquisition. that probably when its, that too on group you call there aggressive that XX-month recall capabilities acquisition that growth brand revenue increased is it the and become and those we Cloud and doubt by deal to we focusing more to our subsequent has originally Hackettize were growth. size to the more leverage deal made segment led and our group we’re clearly total very and the our and Oracle in you in – fully of then in it next But broader that were no size Hackettize allowing the successful that has we call in – the since of if for converting at 'XX, XX in want not that going in we probably May If then, IP

is deals. So yes, bigger the seeing answer we are

larger on to continuing are deals. We bid

aggressive less after. at being We’re going

the should of should acquisition we remember did and continue. we kind the progress that there million XX we’re shortly If that aggressively making plus continue. like you it but after tempering It transactions expectations, our

Jeff Martin

had normal? in that’s you subs Do particular mentioned bit. curious there higher was just anything the that’s Is I little did noise? you or in because period. group was – that activity, if or EEA margins the just normal that depress And a in Okay. if

Ted Fernandez

additional or we certain Yes, some And a W-X resource a to only either lack of resource. a we specific urgent in you a projects. of of situation not the go due very clearly resource us, specialized in for subs scale European probably margin the But to we subcontracted U.S. that and as we skill skills realize same the – was do the that on versus in client bring know, which overall, more fluctuation large transition for when kind which affected also

European reduce momentum. that to one and the from and its client to impacted quarter. during that three very So quarter, transaction decided came as you volatility third at also of the was second pace, that we in same toward second which in group a accelerated the was regain allowing It to us that activities that an then had subcontractors initiatives closed if end recall, the significant the

Jeff Martin

points to are if the cable to strong. customer over terms network it, basically Got what Quantum of and a if Leap there benchmark? Was them of sense Was your been very pinch of with you any And system? has any if it? what of curious in and a just curious you’re shifting Quantum Is Leap of in data feedback of – kind type kind with reaction the mentioned just there then you a reluctance to and okay. has getting year-to-date benchmarking been us nature automated give could

Ted Fernandez

It’s interesting.

extremely has favorable. the been all, of First reaction

become not dramatically The also much fact prevalent. sure get said, or from amount to been you Quantum capability referred base back made our front the is have capability of what we do understand been specific they client ability and re-benchmark make Leap. We the that you need If of has relative want? just we really clients that to data to less has new the The or extraction, deliver on clients easier. significant. that believe see it to our and the in focused to The fully has capture data facilitated

that capture matching ability when addition doubt the is our now not of because we’re the When So information that see close re-benchmark, fully load that is platform That client of want a no ability information, come platform. they access capability tracking that flexibility database that extending then to base. some reassess see a the is has without capability, us the go more comparison scope. our we’re unmatched quickly clients all distinguished fact And presented our their less significantly know The advisory significant. – an then other we like with it’s that the really track having delivering it, that only saying What platform quickly against, to scope is to seem capability. in back data lot way back, ability clients They think with that to the that is effort. in scope to desired to the is initiative clients the great has we from the the the initiatives system, enhanced. we’re access is we client it’s and say are really I data along capability, us that or hearing one client to clients align or unaware directly, to customize if to content those blended element

happen. you glad to up five last I’m picked it So that on a made you make to over the as years know, investment significant because we three

the see all to of we’re there see very it reaction reflected to be with. pleased revenue in and growth, So is something that

Jeff Martin

hear to Glad Thanks it. questions. my taking for Great.

Ted Fernandez

Jeff. you, Thank

Operator

with Vincent from comes question Barrington next Research. The Colicchio

open. is line Your

Vincent Colicchio

in could segment, been more you business, what’s any this maybe were within already what international color beyond what said Ted, Yes. provide promising, the often? pieces were

Ted Fernandez

talking two them, at you’re at look really when marketplaces, talk we you if prospects, the internationally you our Well, and look and UK Germany.

been really has Germany hit know with trade dispute. You the

seeing activity But to by quarter long affected us, tempered significantly and more flow they generally the greater dollars. indecision that recall, started negative extent, operations of to the whether at then seeing you just GDP UK clients we’re the directed just really Western first another. just and being where impact And in XX% clients started dispute. and very we was if investments always is engagements the the latter of first question we’re one seeing not we’re the they in the a is, reassess pause reported businesses is that trade as we would year was affecting to a the to in give obviously elongating they’re the time simply demand part probably align – capabilities not been plus fully the see marketplace. how and fact just – to and that just and our It’s that’s and Brexit European or their made that or last rethink, our time and to of that So their

you on of extended next there has an been gets settled. the know, deadline the hope XXth thing year. As January this is We and election to

I traditional call, think sooner will it’s it on disrupting the as significant. call but rather it wouldn’t have later, us, I been I And decision clearly than mentioned last making. for

in third So it impact quarter. was the had it half of the that

we’ve our of other UK that they notice The marketplace were the one in third streams the we fact that and and year. was quarter really disrupted of acquired last indecision had the seen this significant. since clients basically and two But client that provided the in

be significant, it, look, So phenomenal marketplace, the for deal with they should the better. us, it sooner

Vincent Colicchio

they increase And – do on they’ve give pipelines, pipelines? SAP improved and could you can much qualify the you Oracle us sequentially, how –

Ted Fernandez

nice net it’s SAP year over would grower. SAP, you XX%. a growth Oracle’s know, been the be in we as down Look, and believe

So have our and year. prospects SAP across the both – throughout improved Oracle both

would client to that So revenue, talk improve. on-prem the The And quarter total have been in that from improving. some on our total we current impact those also we on X.X% track that on-premise, continue that if we be about, QX, been down entrants QX, QX higher. the say the new expect you way color to revenue give would flat, revenue look when this X.X%. Based at I X.X% had the to into to about on we prospects

--? to something and on-premise XXXX. helpful that growth both to that stabilization in prospects year-on-year closer of the our means Is getting you revenue help growth So that or is and is the else want combination going the cloud there both flat revenue would we’re

Vincent Colicchio

helpful. that’s No,

last the of number you’re business, look going Just type we question. stable forward? to a QX, The to that one guiding sort at number consider could downside international for

Ted Fernandez

it’s We’d say to be able to love stable.

because sure would be also that, that mitigate the As to we I estimates tried QX a pretty to QX. to would sure conservative be make I that those taking obviously mitigate favorable we wanted and against said impact impact an we could we have statement actions into be earnings then positioned QX. comparison, the into you to mitigated we as if the year-on-year making but can’t Having impossible make. were we know, were as

Vincent Colicchio

Then ones in Rob, quick number you the us did capital Rob. Okay. give spending, quarter? two for that

Robert Ramirez

I did. second, It was approximately – give me Vince. a

I think $XXX,XXX. it was approximately

Vincent Colicchio

margin QX. Okay. what the I gross missed And you for guidance said in in then

Robert Ramirez

to XX% XX%.

Vincent Colicchio

me. That’s it you. for Thank

Operator

At to call the this time, now questions. would back I Mr. show turn over no Fernandez. further I

Ted Fernandez

Thank you, operator.

fiscal thank everyone for look year. Thank we third again the quarter earnings you you. to fourth and when for Let me call. to report We results entire participating on the our quarter our speaking forward

Operator

participation. your appreciate do We conference. today’s conclude does that And

You may disconnect this at time.

The Hackett Group, Inc. (HCKT) 10 Nov 192019 Q3 Earnings call transcript